Bitcoin dipped below $81,000 on Thursday, extending losses after U.S. consumer prices rose faster than expected, reviving bets on a Federal Reserve rate hike. The cryptocurrency was trading at $81,002, down 2.7% in 24 hours. Analysts expect range-bound trading unless a catalyst emerges.
The price action in Bitcoin is closely watched as an indicator of broader market sentiment towards risk assets, particularly in the context of evolving monetary policy. The impact of inflation data on potential Fed rate decisions directly influences the cost of capital and investor appetite for speculative assets like cryptocurrencies.
Bitcoin experienced a sharp decline, briefly falling below the $80,000 mark on Tuesday. This price movement was triggered by U.S. inflation data that exceeded expectations, fueling concerns that the Federal Reserve might maintain or increase interest rates. The sell-off led to significant liquidations in the cryptocurrency market, with approximately $1 billion in positions, predominantly long ones, being liquidated.
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